Thursday, May 20, 2021

America's Social Protection Gap and What to Do About It

Around the world, liberal democracies take pride in the freedom and prosperity of their citizens. And not just prosperity for the prosperous. They also pursue social protection policies that guarantee a minimum standard of prosperity for even the most disadvantaged. In previous writings, I have focused on quality of government in liberal democracies and on policies that engender social and political trust. This commentary turns to social protection policies, entering an area in which the United States struggles to keep up with the standards set by its liberal-democratic peers. 

The first section discusses just which countries can be counted among that peer group. The second explores three quantitative indicators of social protection and shows the degree to which the United States lags behind. A conclusion argues that a policy of faster and fairer growth could allow the United States to close its social protection gap.

Who are our liberal democratic peers?

My starting point in classifying countries by their degree of liberal democracy, as in earlier work, is the concept of liberal rights practices. In his book, Trust in a Polarized Age, Kevin Vallier defines liberal rights practices as rights that are “recognized in constitutional law, exercised regularly by the people, and embodied in public policy.” That approach makes it possible to treat liberal rights practices not just as values or aspirations, but as observable characteristics of public policy to which it is possible to assign numerical scores. 

Vallier lists five liberal rights practices, namely, democratic constitutionalism, markets and private property rights, freedom of association, electoral democracy, and social protection policies. My approach covers a conceptually similar range of practices, but with modifications to terminology and content as needed to better fit the data. Full definitions and data are presented in an online appendix.

  • Quality of governance focuses on government institutions rather than policy outcomes. It includes measures of executive constraints, government integrity, rule of law, and government effectiveness.
  • Quality of market institutions covers property rights, contract enforcement, investor protections, and quality of regulation.
  • Personal freedoms pertain to policies and institutions that guarantee freedom of association, freedom of speech, freedom from discrimination, and agency, a term that Legatum uses to the ability of people to act in accordance with their own desires, based on indicators such as freedom of movement, women’s rights, and due process in criminal law.
  • Procedural democracy is democracy in the narrow sense of regular and fair elections with open participation. Procedural democracy is often associated with personal freedoms and quality government, but those outcomes are not part of the definition of democracy in this sense.
  • Social protection policies are government policies that ensure that basic needs are met, including cash support and other policies, both on-budget and off-budget, that mitigate extreme inequality and ensure acceptable minimum levels of food, shelter, medical care, and communications.

In what follows, I refer to the first four of these categories as basic liberal rights practices. Each country is assigned a score, LRP*, which is an equally weighted average of the standardized scores for quality of governance, quality of market institutions, personal freedoms, and procedural democracy. Vallier includes the fifth item, social protection policies, in his definition of liberal rights practices, for reasons discussed below. However, this commentary turns his definition into a question: To what extent is it actually true that governments that are liberal democracies in other respects also have strong social protection policies?